Assocham flags 'liquidity crisis', seeks measures from RBI

New Delhi: The Reserve Bank should provide a liquidity credit line of Rs 30,000-40,000 crore to non-banking financial companies (NBFC) as a temporary relief from tight liquidity conditions, Assocham said Friday.

In a statement, the chamber's Secretary General Uday Kumar Varma said such steps were essential in view of the current 'liquidity crisis' faced by the Indian economy. He also voiced industry concerns and the growing unease among investors and businesses at large.

Varma observed that in view of the liquidity challenges, monetary policy easing by way of lowering interest rates would give the necessary boost to investor confidence.

He highlighted that due to the various factors that have triggered this liquidity crunch, "beginning with the IL&FS default and measures to keep the rupee from depreciating further, the money markets have seen higher costs of borrowing capital". Seeking urgent attention to the crisis, he appealed for immediate measures to infuse liquidity into the system by RBI.